Spanish bank wants all of Bancomer

Associated Press

Published 6:30 am, Tuesday, February 3, 2004

MEXICO CITY — Banco Bilbao Vizcaya Argentaria, Spain's second largest bank, said Monday it has launched an all-cash offer of $4.1 billion to buy the 41 percent it doesn't already own of its Mexico unit.

The purchase of the rest of BBVA Bancomer, Mexico's biggest bank, would cement BBVA's position as the No. 1 banking entity in the country, ahead of Citigroup, which owns Banco Nacional de Mexico.

The announcement was the latest in a string of high-profile foreign investments in Mexico's banking sector, which has shown signs of a strong recovery from the loan crisis of the mid-1990s.

For years after the crisis, many Mexicans didn't even have bank accounts, and mortgages were nearly nonexistent. But interest rates have fallen to record lows, and Mexicans are seeking lines of credit for everything from cars to apartments.

The resurgence in the banking industry, along with a strong euro, fueled BBVA's decision to expand its share of the Mexican market.

When BBVA took control of Bancomer in 2000, it said it had no intention of acquiring 100 percent of the bank. But Bancomer has become one of BBVA's main areas of growth.

"We want to strengthen the ties that we already have," BBVA President Francisco Gonzalez said in a teleconference from Spain.

The bank has more than 25 percent of Mexico's expanding credit market, nearly 29 percent of client resources and 40 percent of all the industry's transactions.